We ( I and my mother ) run a partnership firm with 50-50 share. We are into pharmaceutical manufacturing. I have a brother who is not involved in this business.
My query is upon demise of any of tge partner , what happens ? Does it get converted to a proprietorship organization ?
Does any of the partner after the other's demise , have the right to induct a new partner if that is mentioned in the contract ?
What happens to the share capital of the deaceased partner ? The share / liability of the deceased partner will get reflected in the balance sheets . How can the share then be dissolved ?
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Partnership Act
Replies (3)
if the partnership consists only of 2 partners and one of them dies and there is no other person who can join then naturally the firm would get dissolved and all the assets/liabilities wud stand transferred to the existing. the firm wud be required to make payment to the legal heirs of the deceased partner of his share in the partnership firm.
however if any of the legal heirs of the deceased can be admitted as a new partner in the firm then he can do so. A corrected deed needs to be drafted and submitted to the ROF for registration.
however if any of the legal heirs of the deceased can be admitted as a new partner in the firm then he can do so. A corrected deed needs to be drafted and submitted to the ROF for registration.
but can't the share of the deceased be shown as erstwhile partner's loan or as borrowing for the business in the balance sheet ? in that case does liability of paying to the heir remain ?
thats the existing liability of the firm and needs to be settled immediately.
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